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Kinross Gold Corp.’s third-quarter profit sank 80 per cent as a result of lower bullion prices, but the company further slashed costs and said it would produce more gold than previously expected from its mines in the Americas, West Africa and Russia.
The improved outlook for Kinross is good news for a company that has seen its share price plummet after it spent a year writing down much of its expensive acquisition of Red Back Mining Inc. and its Tasiast gold project in the Mauritanian desert.
The company cut its total capital expenditures for the year to $1.4-billion (U.S.) from $1.45-billion and said it expects its expenses to fall even further in 2014 to between $800-million and $900-million.
“We continue our focus on reducing capital and other costs in a lower gold price environment,” Kinross chief executive officer J. Paul Rollinson said in a statement announcing the company’s third-quarter results.
Like other mining companies, including the world’s largest gold producer Barrick Gold Corp., Kinross has zeroed in on cost-cutting measures in order to mitigate the slump in gold prices.
With gold dipping below $1,270 an ounce, it is crucial for miners to be able to produce the precious metal well below that price.
For the three months ended Sept. 30, Kinross said it cost a total of $1,069 to produce an ounce of gold. That was higher than the $1,021 outlay in the same period last year. For the year, the company said the total cost, also known as the “all-in sustaining costs,” would be between $1,100 and $1,200 an ounce.
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